Mizuho cuts Circle price target citing AI assistants as risk to USDC revenue
The bank projects a 10% to 20% decline in Circle's reserve revenue as AI agents steer users toward higher-yielding fiat options.
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Mizuho lowered its price target for Circle on October 26, 2026, and maintained its underperform rating, citing AI personal assistants as a risk to the stablecoin issuer’s revenue.
The bank’s simulation involved AI agents, including one named Muse, which recommended moving USDC into higher-yielding, FDIC-insured fiat options like SoFi savings accounts. Even users who preferred to stay in crypto were directed to other platforms instead of holding USDC within Circle’s ecosystem.
Mizuho estimates that broader adoption of AI agents could reduce USDC’s market capitalization by $4 billion to $9 billion and cut Circle’s medium-term reserve revenue by 10% to 20%. In a faster-adoption scenario, about $7 billion would shift into fiat products and $2 billion into higher-yielding stablecoins, with reserve revenue declining by 18%. The bank now forecasts 2027 average USDC circulation at $101 billion, down from $108 billion, and reserve revenue at $4.1 billion, down from $4.3 billion. These figures are projections, not observed outflows.
Circle’s revenue comes almost entirely from interest on USDC reserves, and the stablecoin does not offer yield to holders on Circle’s platform. In the second quarter of 2026, approximately 17% of USDC was held on Circle’s platform, 30% on Coinbase, and 53% elsewhere, according to Mizuho data reported by The Block.